An editorial in the Dispatch this morning gives Ohio's pension plans a bit of a nudge on what they need to do to remain viable and fair to taxpayers:
After the plans suffered huge investment losses in the stock-market swoon of 2008 and 2009, the Ohio Retirement Study Council helped make recommendations for how each could become financially sound. The suggestions include increasing contributions by employees as well as taxpayers and, in some cases, higher retirement ages.Ohio's pensions are a massive drain on the state's budget. How Kasich addresses this issue will be key to resolving the black hole of a deficit left behind by Governor Strickland.
But any fixes should come primarily from public employees. Public-pension terms, especially the early retirement ages, already are far more generous than those enjoyed by most private-sector workers. Along with generous employer contributions, some cities and school districts also pick up some or all of the portion, typically 10 percent of salary, that employees are expected to pay.
Public pensions are further burdened by their voluntary decision to provide health-care coverage to retirees.
To its credit, the School Employees Retirement System, whose members include mostly lower-wage, nonteaching employees of school systems, has made a reasonable proposal to increase its minimum age and service requirements to retire, and is not suggesting any increase in the taxpayer contribution of 14 percent of salary.
These are steps in the right direction that all the public pensions should follow.